MK NIFTY Options Trading System for Day Trading

mrkanitkar

Well-Known Member
#1
I am working on Options trading system for last few months. I done lot of studies on Options Strategies, cleared NCFM exams on Options and done back-testing on various trading systems. For positional Options trading, one should use Options Strategies than naked options. Many people including my friends are interested making huge profits in Intraday options trading systems than Options Strategies. Options Strategies need higher investment. Day option trading is mostly buying naked options with little or no hedging. This is highly risky and lucrative business. Most of day trading systems for options are trend following ones than counter trend.
You can download AFL from http://kanitkar.com/maheshwar/?p=118 or below.
Here is snapshot.

Here is youtube video http://youtu.be/4LIT4ne43S8
Here is trading plan.

  1. Only Intraday Nifty Options trading and not overnight positions.
  2. Time Frame 15 mins only.
  3. Please plot ema 3 and ema 13 on charts provided by trading software or use popular charting products like Amibroker, Metastock, Metatrader.
  4. Buy rule = EMA 3 crossing EMA 13 from below, means EMA 3 > EMA 13. You can also use SMA 10 on crossover for confirmation.
  5. Stop loss rule = If price is above 60, 5-8% of high of last 3-5 candles, if price is below 60, 5% of of high of last 3-5 candles.
  6. Sell rule = EMA 3 crossing EMA 13 from above, means EMA 3 < EMA 13. ( not needed many times as Profit booking comes before). Remember sell rule may come quite late from top, so you may be giving lot of profits by waiting for sell signal. If market is flat then sell rule will help you to keep in trade as you are trading on 15 min. Always sell below low. There will be many times you will find no new low and so you will stay in trade and can close trades on break even.
  7. Profit booking rule = Trailing profit of 3% from current closing price, once hit exit or Close of current is less than Close of last candle by 3% or more or RSI 21 is above 70 or Fibonacci retracement levels for targets.
  8. Broker – for more than 3 orders a day – use RKSV – monthly fix 1947/- for unlimited trades, unlimited lots, Zerodha for less than 3trades per day – 20 Rs. per order with unlimited lots or 1 lot a day use RKGlobal.
  9. For selecting strikes, look at Nifty spot around 9:30 and select ATM strikes. For more risk and more profits you can select OTMs, if markets move fast, profits will be great.
  10. Always buy above the high of signal bar by 1-2 Rs. (as per your comfort).
  11. Never allow profits turn losses just because sell signal is not there.
  12. Always keep SL in system with acceptable trigger. Remember this is Nifty, one movement on nifty can be of 30 -50 points in 1 min and you will be in deep losses, so never forget to keep SL in system.
  13. Profit booking should ideally happen by trailing SL, which should also be in system. This helps to trail better.
  14. There is nothing about options shorts in this system.
  15. 1 min & 5 min TF gives lot of whipsaws, do not try.
  16. If you are using Amibroker then you will see green candle, SL line is drawn at 5%. Please set parameters as you wish. There are sound alerts on buy and sell bars so keep volume at medium level. Candles are colored as per formula and not as per candlestick patterns. On red candle, please sell below low.
  17. If you are using Metastock then please import the formula and expert adviser. Please apply the template and save template one more time. You will find sound alerts, vertical green, red lines for first buy or sell signals. Please set line to bars. Bars are colored as per formula.
  18. Please note you need to have live, Real time or near real time data to trade. Please wait until 9:31 for first trade and close all trades before 3:15 pm.
  19. Be cautious on signals generated on earlier day. You may get green bar / candle but buy above high rule will save you. Also remember options prices dramatically go down even if spot prices do not change as volatility reduced.
  20. 15 min TF and SL in system will give you relaxation in trading than stress.
  21. Never trade on expiry day unless you can change body colors in seconds. (like few animals). On events day like RBI policy do not start any trade in morning. Use 1 min TF 15 min before policy event, based on signal take trade.
  22. Consistently making money by buying naked options is always difficult.
  23. If you draw HHV and LLV of 9 or 26 period will help you to identify sideways market as these lines will be flat in sideways market. These lines can be similar to Tenkan sen and Kijun sen in Ichimoku Kinko Hyo. If you keep speaker's volume on, you will hear notification alerts.
------------------------------------------------
Here is AFL
---------------
// MK Options Trader for NIFTY Options.
// By Maheshwar Kanitkar 1-8-2012.
_SECTION_BEGIN("Options Trader");

SetChartOptions(0,chartShowArrows|chartShowDates);
_N(Title = StrFormat("{{NAME}} - {{INTERVAL}} {{DATE}} Open %g, Hi %g, Lo %g, Close %g (%.1f%%) {{VALUES}}", O, H, L, C, SelectedValue( ROC( C, 1 ) ) ));

//STOP LOSS code
//The formula draws a stoploss loss line which will be 2% below the Highest Close within a lookback period of 5 bars.
//You can change these parameters.

lookbackPeriod = Param("Lookback period", 5, 1, 30);
stoplossPercentage = Param("Stoploss Percentage", 3, 2, 10);
TrailingSL= HHV(C,lookbackPeriod) - HHV(C,lookbackPeriod) * (stoplossPercentage / 100) ;
//Plot(HHV(C,lookbackPeriod) - HHV(C,lookbackPeriod) * (stoplossPercentage / 100), "TrailingSL", ParamColor( "Color", colorCycle ));
Plot(TrailingSL, "TrailingSL", ParamColor( "Color", colorCycle ));

// end of stop loss code.

ea = EMA (C,3);
eb = EMA (C,13);
SetBarFillColor( IIf( ea > eb, colorGreen, colorRed ) );
Plot( C, "Price", IIf( ea > eb, colorGreen, colorRed ), styleCandle );
Buy = ea > eb AND TimeNum() > 092000 AND TimeNum() < 150000;
Sell = eb > ea OR TimeNum() > 150000;
Short = 0;
Cover = 0;
Buy = ExRem(Buy,Sell);
Sell = ExRem(Sell,Buy);
Short = ExRem(Short,Cover);
Cover = ExRem(Cover,Short);

// Code to plot signals
dist = 1.5*ATR(10);
for( i = 0; i < BarCount; i++ )
{
if( Buy ) PlotText( "Buy Signal\n@" + C[ i ], i, L[ i ]-dist,colorWhite, colorBlue );

if( Sell ) PlotText( "Sell Signal\n@ " + C[ i ], i, H[ i ]+dist,colorRed, colorYellow );
//if( Short ) PlotText( "Short\n@" + C[ i ], i, H[ i ]+dist, colorRed, colorYellow );
//if( Cover ) PlotText( "Cover\n@" + C[ i ], i, L[ i ]-dist,colorGreen );
}
PlotShapes( Buy * shapeUpTriangle + Sell* shapeDownTriangle, IIf( Buy,colorYellow, colorYellow ) );
// PlotShapes( Sell * shapeDownTriangle + Sell * shapeDownTriangle, IIf( Buy,colorGreen, colorRed ) );
// Sound
AlertIf( Buy, "SOUND c:\Windows\Media\chimes.wav", "Buy alert", 2 );
AlertIf( Sell, "SOUND c:\Windows\Media\chimes.wav", "Sell alert", 3 );
// Interpretation Data
// Maheshwar Kanitkar 2012.
printf("Welcome to MK Options Trading system help:\n");
_N( tname = Name()+"("+FullName()+")" );
printf( tname + " has closed " + WriteIf( EMA (Close,3) > EMA (Close,13), "above medium term moving avg, this is Buy signal.\n" , "below medium term moving avg, this is Sell signal.\n" ) + " Follow the trading rules. ");
printf("Trading rules - Buy on Green candle, SL is redline, Once position is in Profit, book profit once prices touches redline, Sell if position goes below redline or Candle becomes red.");

_SECTION_END();
-----------------------------------------
The system have given 130% returns on 5300 PE, 5300CE in current series in 49 trades. I have tested it in multiple series. AFL ensures no trade happens before 9:30 and after 3 Pm. The attached image shows sell signal at 3:15 because it's intraday system.
--------------
Here is link for Metastock kit.
http://www.4shared.com/zip/LEQqJOPV/Metastock_kit_options_trading.html?refurl=d1url
 
Last edited:
#2
sir there is prob in atr not ploting correctly in my charts

red line(SL) & buy sell signals ploting at downside of candles very far. give ur mail id so i can send u screen shot of that
 

mrkanitkar

Well-Known Member
#4
sir there is prob in atr not ploting correctly in my charts

red line(SL) & buy sell signals ploting at downside of candles very far. give ur mail id so i can send u screen shot of that
Are you using Futures chart or Options chart? Please use param settings and set it to 5% and 5 candles as loop back.
You can upload image here.

@ prabhsingh
You can get it from your trading terminal. You can use Josh1's utility or get it from Global data feed.
 
#6
Mr. mrkanitkar

see attachment of my chart


i m watching nifty spot chart. and please also tell which RT data u r using for Option charts i mean which Rt data provider ?

thanks
 
Last edited:

mrkanitkar

Well-Known Member
#7
@a1b1trader
This is option trading system, it works on Options chart and not spot or futures.
You have to open both call and put charts same time so you can see signals in one go.

@yrjadeja

You need to use options chart. Please have a look at video. Here is youtube video http://youtu.be/4LIT4ne43S8

I am using Josh's utility given on traderji for getting options charts. You can find more details in http://www.traderji.com/data-feeds/...gle-yahoo-amibroker-fcharts-qtstalker-42.html

You can also use Global data feed data as well.
 

a1b1trader

Well-Known Member
#8
@a1b1trader
This is option trading system, it works on Options chart and not spot or futures.
You have to open both call and put charts same time so you can see signals in one go.
Thats why I was getting an error in ami 5.50.
OK I will start with the charting of call and put options using odin data feed. But have 2 queries
1. Any value call and put options will do or any particular strike.
2. How to open 2 charts (1 for call option and 1 for put option) in same frame.

Further I found in above image that this AFL is working with nifty chart as well. How it is so.

Thanks
 
#9
thanks for your reply and sir can u setup on my laptop for option charts. ur method looks very interesting and i want to trade with it.

i have completed nse now to amibroker but problem is of backfill how to do that if you know please guide or do setup in my pc
 

Similar threads